Your Questions About Stock Market Is A Ponzi Scheme

I want to change my 401(k) stocks. The stocks I’m looking at have a good year-to-date % but a low dividend?

yield of 0.0 %. Are these stocks worth buying?

Justin answers:

Many good stocks don’t pay dividends in recent history mainly because dividends are usually taxed higher, much higher for high income people, in the past. Capital gains are taxed lower.

But this Bear Market and Recession like we haven’t seen in a long long time is teaching old lessons to a new generation of investor that dividends provide safety and reduce risk by paying money back to you. And companies can manipulate, even fake, financial reports but they can’t fake dividends (with the exception of a Ponzi scheme).

Do you have an after tax brokerage account? I ask because I like to have the high yield stocks in my 401(k) where the dividends are tax deferred and the low or no yield stocks in my tacable brokerage where I would have to pay taxes on the dividends if they paid them.

But I also know; ” You never go broke paying taxes on profits”.

Donald asks…

I have 500 bucks.. and I want to make 3000 within a week. what can i do?

I have $500 in my paypal and I want to make $3000. What can get me that much money?

Please DO NOT recommend any gambling sites or any HYIP investing.. and no ponzi pyramid schemes either… im ready to work day and night for something legit and which guarantees money.

Justin answers:

Ali,

The only way to turn $500 into $3000 in a week, is to GAMBLE. That means you can go to vegas or reno and play some blackjack or something… Or you can put it in the stock market, but most online trading firms require 4 business days to clear funds before you trade and 4 days to clear funds before you can withdraw. So, that right there is more than a week.

Your best bet is to go and gamble it at a local casino. Of course, this means your $500 will go poof most likely too.

ANYONE telling you otherwise is lying to you.

John asks…

Why do they do these things? What can a 70-year old man do with 50 billion dollars anyway?

…
he could never spend it all. And five or even 10 billion
would be a comfortable amount to leave to his heirs.

Is it that the money doesn’t matter as much as being able to get away with it?

Is it that they think money will buy them women, jewels, mansions, yachts,etc.?

Or do these kind of people just get a real kick out of defrauding others?

NEW YORK (Reuters) Bernard Madoff, a quiet force on Wall Street for decades, was arrested and charged on Thursday with allegedly running a $50 billion “Ponzischeme” in what may rank among the biggest fraud cases ever.

The former chairman of the Nasdaq StockMarketis best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. But he also ran a hedge fund that U.S. prosecutors said racked up $50 billion of fraudulent losses.

Madoff told senior employees of his firm on Wednesday that “it’s all just one big lie” and that it was “basically, a giant Ponzischeme,” with estimated investor losses of about $50 billion, according to the U.S. Attorney’s criminal complaint against him.

APonzischemeisa swindle offering unusually high returns, with early investors paid off with money from later investors.

On Thursday, two agents for the U.S. Federal Bureau of Investigation entered Madoff’s New York apartment.

“There is no innocent explanation,” Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he “paid investors with money that wasn’t there,” according to the complaint.

The $50 billion allegedly lost would make the hedge fund one of the biggest frauds in history. When former energy trading giant Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.

U.S. prosecutors charged Madoff, 70, with a single count of securities fraud. They said he faces up to 20 years in prison and a fine of up to $5 million.
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and yes I realize that he has to be proven guilty, but he probably is, so I chose to ask these questions.
stop trying to mislead me. The fact is that he had “control” over these investments. With overall ‘control’ the money was his to invest or re-invest as he saw fit.The man isa fraud.

Justin answers:

These people do not recognize their mortality.Only sane individuals do.

Thomas asks…

Is Goldman Sachs too big to fail, or just too big?

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece?token=null&offset=0&page=1 I’m doing ‘God’s work’. Meet Mr Goldman Sachs…a political force more powerful than governments. …When they have finished getting “filthy rich by 40”, as the company saying goes, these alpha dogs don’t put their feet up. They parachute into some of the most senior political posts in the US and beyond, prompting accusations that they “rule the world”.

http://www.nytimes.com/2009/11/06/nyregion/06flu.html?_r=1&scp=1&sq=officials%20defend&st=cse
New York City health officials have distributed small amounts of the swine flu vaccine to some major New York companies, including Wall Street banks like Goldman Sachs…, even as shortages continue. …Goldman received 200 [doses] …according to the New York City Department of Health and Mental Hygiene . . .Many hospitals and pediatrician’s offices are waiting to get their supplies.

http://en.wikipedia.org/wiki/Goldman_Sachs
…acts as a financial advisor and money manager for corporations, governments
, and wealthy families around the world. …It isa primary dealer in the U.S. Treasury securities market
. . .. …Former Goldman Sachs employees Robert Rubin and Henry Paulson served as United States Secretary of the Treasury after leaving the firm; Rubin under President Clinton and Paulson under George W. Bush. ………..On December 4, 1928, it launched the Goldman Sachs Trading Corp. a closed-end fund with characteristics similar to that of aPonzischeme. .. The fund failed as a result of the StockMarket Crash of 1929 . . . . …in 1999 ..18% was held by retired Goldman partners and two longtime investors, Sumitomo Bank Ltd.and……It also advised on a debt offering for the Government of China and the first electronic offering for the World Bank . . . .. . ..The firm is also heavily involved in energy trading, including the oil speculation market, on both a principal and agent basis. .. .In May 2006, Henry Paulson left the firm to serve as U.S. Treasury Secretary. . . Former Goldman employees have headed the New York Stock Exchange, the World Bank, the U.S. Treasury Department, the White House staff, and firms such as Citigroup and Merrill Lynch. …Goldman also received $10 billion of capital from the U.S. government in October 2008, under the Troubled Asset Relief Program . . . .. ….In March 2009 it was reported that in 2008, Goldman Sachs, alongside other major US and international financial institutions, had received billions of dollars during the unwind of credit default swap contracts purchased from AIG, including $12.9bn from funds provided by the US Federal Reserve to bail out AIG. . . .Goldman was among ten large financial institutions that the Treasury allowed to pay back their TARP emergency capital infusions, though this was after the firm benefited from the FDIC’S Temporary Liquidity Guarantee Program when it issued $28 billion in debt to raise capital….As of 2006, Goldman Sachs employed 23,467 people worldwide. …It was reported that the average total compensation per employee in 2006 was US$622,000. However, this number represents the arithmetic mean of total compensation and is highly skewed upwards as several hundred of the top earners command the majority of the Bonus Pools, leaving the median that most employees earn well below this number. ..The current Chief Executive Officer … Lloyd C. ..Blankfein earned a $67.9 million bonus in his first year. …In mergers and acquisitions, it gained fame historically by advising clients on how to avoid hostile takeovers, moves generally viewed as unfriendly to shareholders of targeted companies. Goldman Sachs, for a long time during the 1980s, was the only major investment bank with a strict policy against helping to initiate a hostile takeover, which increased Goldman’s reputation immensely among sitting management teams at the time. …Former Treasury Secretary Hank Paulson was a former CEO of Goldman Sachs. The current chief economic adviser to President Obama, Lawrence Summers, was noted for receiving $5.2 million from hedge fund D.E. Shaw

in 2008 and speaking fees (ranging from $45 thousand to $135 thousand per event) from banks including Goldman Sachs, JPMorgan Chase, Citigroup, Lehman Brothers and Merrill Lynchat a time when he was expected to become the most influential financial official in the U.S. Government…..the selection of former Goldman Sachs lobbyist Mark Patterson as chief of staff to Treasury Secretary ….Goldman Sachs was the largest single recipient of this money [the AIG Bailout] (USD 12.9B), . . .The relationship with, and bailout of AIG wa

Justin answers:

Neither, just too well connected.

Mark asks…

Do you think that Social Security is a Ponzi scheme?

Justin answers:

Absolutely!

A true Ponzi scheme promises an abnormally high returns (“profits”) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business action.

That’s exactly how Social Security works.

A person pays into the scheme for years, all the while, being promised that they’ll be able to live on the payout. Meanwhile, what he’s been paying in has been sent directly out to others who are in the pay-out part of the scheme…

The only way it works is if we all “recruit” 5+ people to pay into the scheme. If every fertile couple has 5+ children that they raise to get full-time jobs when they grow up, then Social Security will continue to work.

Unfortunately, the BabyBoomers (born shortly after WW2) outnumber the two generations that come after them- X (born in the 60s and 70s) and Y/Millenials (born in the 90s) generations together cannot earn enough to pay out what the BabyBoomers are going to need to live/survive.

Speaking of which- do you KNOW what is going to happen/is happening with the BabyBoomers retiring? They’re taking money out of their 401Ks- guess where that money has been hiding? It hasn’t been laying around gathering dust in a bank vault! It’s been in the stock market…

Think about that for a minute… It might be a little slower than the first time, but there are those who think it’s still going to happen.

Richard asks…

why did federal reserve come to the rescue of bear stern? read details.?

the principles of capitalism say, that state should not interfere and any economic problem would be settled by market forces. Then instead of leaving the bear stern crisis to market forces, why did federal reserve bail out?

Justin answers:

Not only did they overstep their bounds, its possible they broke the law by using American Tax Dollars to bail out a PRIVATE company. But then again, the Fed IS a private company, so that may shed some light on why they didn’t mind using public money to help their banker friends.

The Federal Reserve is NOT A GOVERNMENT AGENCY. Anyone who claims this is lying. The Federal Reserve is not listed in the Government Directory of any phone book, it is listed in the white pages with all other private entities.

The Federal Reserve Bank, a.k.a Federal Reserve System, is a Private Corporation. Black’s Law Dictionary defines the “Federal Reserve System” as a: “Network of twelve central banks to which most national banks belong and to which state chartered banks may belong. Membership rules require investment of stock and minimum reserves.” Privately-owned banks own the stock of the FED. This was explained in more detail in the case of Lewis v. United States, Federal Reporter, 2nd Series, Vol. 680, Pages 1239, 1241 (1982), where the court said: “Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank’s nine member board of directors”.

Also according to Black’s Law Dictionary, we find that these privately owned banks actually issue money:

“Federal Reserve Act. Law which created Federal Reserve banks which act as agents in maintaining money reserves, issuing money in the form of bank notes, lending money to banks, and supervising banks. Administered by Federal Reserve Board (q.v.)”.

Section 4 of the Federal Reserve Act even designates the Fed as a PRIVATE CORPORATION.

“Upon the filing of such certificate with the Comptroller of the Currency as aforesaid, the said Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power—

First. To adopt and use a corporate seal.

Second. To have succession after the approval of this Act until dissolved by Act of Congress or until forfeiture of franchise for violation of law.

Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of law or equity.
Etc, etc………………………………….

Http://www.federalreserve.gov/generalinf…

Also, the Board of Governors, which is supposed to (supposedly) oversee the Fed and keep it on a leash, was complicite in Bear-Stearns, which proves that the Board of Governors “oversight” is a sham.

Interestingly, at the time of the Bear-Stearns debacle, the Senate had held up the nominations of two Candidates for Board of Governors for months, so there were only five members. If the Board of Governors is so important, why did they hold up the Nominations for so long? Also, only Four members of the Board voted to authorize the Bear-Stearns bailout, but then they lied, claiming a unanimous vote of five, when one of the members was “abroad.” Why would the Board of Governors lie about this?

The point is, the FED is a Ponzi Scheme, and they just took millions of dollars of YOUR MONEY and gave it to a PRIVATE COMPANY. Isn’t Extreme Socialism Grand!